Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Cheyenne Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Cheyenne Inc. follows IFRS. Year Accounting Income (Loss) Tax

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Cheyenne Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Cheyenne Inc. follows IFRS. Year Accounting Income (Loss) Tax Rate 2020 $319,000 25% 2021 128,000 25% 2022 (579,000) 22% 2023 408,000 22% The tax rates were all enacted by the beginning of 2020. Prepare the journal entries for the years 2020 to 2023 to record income taxes, assuming the tax loss is first carried back and that at the end of each year, the loss carryforward benefits are judged more likely than not to be realized in the future. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 2020 2021 2022 (To record benefit from loss carryback.) (To record deferred tax benefit from loss carryforward.) (To record current tax expense.) (To record deferred tax expense.) Prepare the journal entries for 2022 and 2023 assuming that, based on the weight of available evidence in 2022, it was more likely than not that only 75% of the carryforward benefits will be realized (25% not expected to be realized). In 2023, actual income was higher than originally anticipated. A valuation allowance account is not used by the company. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit (To record benefit from loss carryback.) (To record deferred tax benefit from loss carryforward.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions